Posted on 09/10/2018 8:36:08 AM PDT by reaganaut1
When President Trump promised to make America great again, the employees at Mid Continent Nail in Missouri probably didn’t expect he would put them out of work. But the steel tariffs imposed in June have the company hanging by a thread.
Mid Continent is the largest nail manufacturer in the U.S. and has been in Missouri for more than 25 years. It had 500 employees at its Popular Bluff plant and was the second largest employer in the small town before the Trump tariffs hit.
The trouble for Mid Continent is that foreign producers making nails abroad use low-price steel and export their production to the U.S. They can offer better prices than their U.S. rival because, as Chris Pratt, operations general manager for the plant, explained in a Journal op-ed last month, the tariffs pushed costs up “overnight” and made the company uncompetitive. “Orders dropped 70% in two weeks, and our workforce shrank from 500 employees to 370,” he wrote.
Mid Continent is seeking a tariff exemption from the Commerce Department on grounds that it can’t find enough of the steel wire it needs in the U.S. Nucor Corporation, a U.S. steelmaker that is reaping profits from the tariffs, objected to Mid Continent’s request and said it could supply the steel wire. Mid-South Wire Company said the same. But last week CNN Money reported that Mr. “Pratt said that neither company on its own could supply enough raw material.”
(Excerpt) Read more at wsj.com ...
Largest US nail manufacturer clings to life under steel tariffs
Troubled Missouri nail company could be in its last month of operation
Sounds like the problem is letting in the cheap foreign-produced nails.
Trump should get on that.
Frankly, this is short term pain for long term gain.
You can ALWAYS find an individual who’s suffering next to a multitude that are excelling.
The economy is doing great, unemployment is the lowest in a long time, but I have no job - so we’re doing horribly. Or not.
The downside of tariffs. Trump is betting the Chinese (or whoever) will back down before we do.
We need to win that bet or there will be more cases like this.
Cheap foreign steel?
No wonder all my nails seem to be bending lately.
The globalists at the WSJ had to look long and hard to find this sob story. They miss JEB!
yet if there’s one thing certain about imposing tariffs, is that it hurts the majority in order to help a minority.
Surely there must be a federal contract somewhere to help this small company weather this storm.
Where do the other nail makers get their steel from?
I like Trump’s instincts on trade. Problem is that he’s taxing the wrong things. China taxes high value-added items and leaves basic inputs alone. So it would make sense to place a 200% tariff on China assembled phones phased in over 5 years, rather than the 25% currently mooted, and leave the penny ante stuff like pencils and bubble envelopes alone.
So does the OP, he wants somebody else in 2020.
It doesn’t matter in what form the steel is imported. Whether as roll, ingot, or nail, it needs to be tarifed.
Though I can see how this could be problematic.
“The globalists at the WSJ had to look long and hard to find this sob story. They miss JEB!”
Exactly.
[Where do the other nail makers get their steel from?]
The same WSJ that called for “a five-word Constitutional amendment: ‘There shall be open borders’?” That WSJ?
Exactly.... there is always PAIN... no matter what happens policy wise, someone wins and someone loses... but does the pain have a purpose?
Better trade agreements and intellectual property protections are far bigger winners at the end of the day....
China can’t win, and they know it... we are the largest consumer economy on the planet... they need our buyers far more than we need their products... and that’s the leverage point every talking head refuses to acknowledge.
Without the US consumption market, China goes into a major recession... can’t prop up its currency or make its domestic and foreign obligations for too long... Whereas the US can find alternate providers or ramp up domestic production to replace whatever China provided.
That is the crux of it. You said it well. There’s no question that some companies are going to get smushed, and I would have no issue with the IRS generating some special exemptions for those legitimately harmed. As someone who trades stocks a lot and watches metals stocks a lot (X, RS, NUE, AA, CENX) the metals producers are not exactly doing spectacular as a result of the tariffs (or the threat of tariffs) and the market effect(s) to me are not conclusive; this of course assumes that the market rationally assigns values (eg; prices) to the companies based upon their perceived earnings and revs, and that is not especially an ironclad cause and effect relationship.
So individually, neither metals manufacturer and make enough steel to be used as raw material. So what? Wouldn’t it be better to have two suppliers anyway?
Trump is using these tariff’s very effectively to get better deals from our trading partners. Sure there will be short term pain in certain industries for long term gain in ALL industries.
The labor force participation rate is declining. The actual number of people in the work force seems to be falling, according to BLS figures. This makes the "unemployment rate" appear better than it is.
Might just be a consequence of all those "baby boomers" retiring to live out their Golden Years. Perhaps the numbers are too gimmicked to be reliable.
Wages do not appear to be rising.
Best to keep paying attention to the little things. And cross-check them.
There’s no easy answer. Yes, some are hurt by higher tariffs, but its also true that China would destroy the entire world’s steel industry with its centrally planned subsidies.
I wonder what this company’s supply-chain looks like? Managing sources and supply is as important as the sales function. I have no doubt this isn’t the first time they have faced problems with politically-sensitive steel duties and trade actions.
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